Federal Communications Commission DA 12-1795
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
Request for Review of a Decision
of the Universal Service Administrator by
Atlanta Public Schools
Atlanta, Georgia
Schools and Libraries Universal Service
Support Mechanism
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File No. SLD-252678
CC Docket No. 02-6
ORDER
Adopted: November 9, 2012 Released: November 9, 2012
By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
I. INTRODUCTION
1. In this order, we grant an appeal of a decision by the Universal Service Administrative
Company (USAC) denying an invoice submitted for non-recurring charges by Atlanta Public Schools’
(Atlanta) service provider, BellSouth, for discounted services under the E-rate program (more formally
known as the schools and libraries universal service support program) for funding year 2001.1 USAC
denied the invoice on the ground it had only authorized support for recurring charges in funding request
number (FRN) 634307. We remand the underlying application associated with this appeal to USAC for
further action consistent with this order.
II. BACKGROUND
2. Under the E-rate program, eligible schools, libraries and consortia that include eligible
schools and libraries may apply for discounts for eligible telecommunications services, Internet access,
and internal connections.2 Applicants may request support for eligible services that are recurring, in
which case the services must be installed during the relevant funding year, and for eligible services that
are non-recurring, which are one-time services that must be installed by September 30 following the close
of the relevant funding year.3
1 Letter from Robert W. Beman, Chief Information Officer, Atlanta Public Schools, to Office of the Secretary,
Federal Communications Commission, CC Docket Nos. 96-45 and 97-21 (filed June 2, 2003) (Request for Review).
Section 54.719(c) of the Commission’s rules provides that any person aggrieved by an action taken by a division of
USAC may seek review from the Commission. 47 C.F.R. § 54.719(c) (2001).
2 47 C.F.R. §§ 54.501-54.503 (2001).
3 47 C.F.R. § 54.507(d) (2001).
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3. On January 17, 2001, Atlanta submitted an FCC Form 471 application to USAC, which
included FRN 634307, for recurring and non-recurring services for 60 elementary schools for funding
year 2001.4 During USAC’s program integrity assurance (PIA) review of Atlanta’s application, Atlanta
agreed to change a portion of the amount requested from non-recurring to recurring charges.5 On August 1,
2001, USAC modified Atlanta’s funding request and reclassified all of the services requested on FRN
634307 as recurring charges for telecommunications services, but did not notify Atlanta of this change.6
On August 7, 2001, USAC issued a Funding Commitment Decision Letter (FCDL) approving Atlanta’s
funding request and noting it had modified Atlanta’s funding request, explaining only that the estimated
recurring monthly charge requested by Atlanta was changed “to reflect the documentation provided by the
applicant.”7
4. After receiving the FCDL, Atlanta notified its service provider, BellSouth, to proceed
with implementation of the requested services.8 In December 2002, BellSouth submitted invoices to
USAC for reimbursement for services provided to Atlanta.9 USAC denied payment to BellSouth because
the services included in the invoices were for non-recurring charges, but USAC had not authorized
support for non-recurring charges.10 Atlanta appealed the denial of payment to USAC.11 USAC denied
the appeal on the grounds that Atlanta filed its appeal with USAC more than sixty days after USAC’s
FCDL to Atlanta.12 Atlanta then filed the instant appeal with the Commission.13
5. In its appeal to the Commission, Atlanta argues that because the FCDL did not specify
what changes USAC made to Atlanta’s funding request, Atlanta did not have adequate notice of USAC’s
reclassification as recurring charges all of the non-recurring charges for services for which Atlanta sought
E-rate support.14 Atlanta argues that USAC’s denial of its appeal was not appropriate given that the
4 See FCC Form 471, Atlanta Public Schools (filed Jan. 17, 2001) (Original FCC Form 471).
5 Request for Review at 4; Letter from Harollyn E. Johnson, Atlantic Public Schools, to USAC, Schools and
Libraries Division (dated Jul. 18, 2001) (directing USAC to change the designation for the data voice line service
from a non-recurring to a recurring charge). USAC performs PIA reviews to verify that the discounts recipients seek
are for eligible services, provided to eligible entities, and for eligible uses. See USAC website, Schools and
Libraries, Program Integrity Assurance, http://www.sl.universalservice.org/reference/6pia.asp (last viewed Nov. 7,
2012).
6 See FCC Form 471, Atlanta Public Schools (dated Aug. 1, 2001) (Modified FCC Form 471).
7 See Letter from USAC, Schools and Libraries Division, to Arthur R. Scott, Atlanta Public Schools (dated Aug. 7,
2001) (FCDL). Atlanta originally requested funding for telecommunications services with a pre-discount amount of
$15,100,011 for non-recurring charges. See Request for Review at 2. USAC subsequently approved a pre-discount
amount of $14,986,518 with an 84 percent discount, for a final funding commitment decision of $12,588,675. See
FCDL at 6.
8 Request for Review at 2.
9 See id. at 3. BellSouth submitted an invoice under FRN 634307 in the amount of $7,466,243. BellSouth Invoice
No. 349837 (dated Oct. 20, 2002).
10 Request for Review at 2. Atlanta noted that no formal notice of the funding denial was submitted to BellSouth
and that the information was communicated over the telephone.
11 Letter from Robert W. Beman, Chief Information Officer, Atlanta Public Schools, to USAC, Schools and
Libraries Division (dated Mar. 21, 2003) (USAC Appeal).
12 Letter from USAC, Schools and Libraries Division, to Beverly L. Hall, Atlanta Public Schools (dated Apr. 3,
2003). The FCDL was issued on August 7, 2001, and the appeal was dated March 21, 2003. See FCDL; USAC
Appeal.
13 See Request for Review.
14 Id. at 3-4.
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FCDL and accompanying explanation were insufficient to put Atlanta on notice that there was an issue
with the funding commitment.15 Atlanta also contends that its appeal was promptly submitted to USAC
within 60 days of being notified that the invoice submitted by BellSouth was denied.16
III. DISCUSSION
6. We grant Atlanta’s appeal. Based on the record before us, we find that Atlanta lacked
adequate notice of USAC’s reclassification of its telecommunications services from non-recurring to
recurring charges, and USAC impermissibly denied the BellSouth invoice based on USAC’s
reclassification of the services sought by Atlanta. As discussed above, USAC modified Atlanta’s funding
request, but did not provide a sufficient notice to Atlanta of the funding change.
7. Based upon the facts and circumstances of this case, we find that USAC’s complete
rejection of the invoice is unwarranted. We therefore grant Atlanta’s appeal and remand the underlying
application and invoice to USAC for further processing consistent with this order. We instruct USAC to
gather additional information from Atlanta to determine whether Atlanta’s requested services for FRN
634307 were for non-recurring or recurring charges. If, after further inquiry, USAC finds that some or all
of Atlanta’s services are for non-recurring charges, then USAC shall process Atlanta’s application for
funding and the invoice submitted by BellSouth, Atlanta’s service provider, accordingly. In remanding
this application and invoice to USAC, we make no finding as to the ultimate eligibility of the services or
the petitioner’s application. Moreover, we note that, at this time, there is no evidence of waste, fraud or
abuse, misuse of funds, or a failure to adhere to program requirements. To the extent necessary, we also
waive section 54.507(c) of the Commission’s rules to allow USAC or Atlanta to correct any errors on
Atlanta’s FCC Form 471.17 To ensure these issues are resolved expeditiously, we direct USAC to
complete its review of the underlying application and invoice, and either grant or deny BellSouth’s
invoice based upon a complete review and analysis, no later than 90 days from the release date of this
order.
IV. ORDERING CLAUSES
8. ACCORDINGLY, IT IS ORDERED, pursuant to authority contained in sections 1-4 and
254 of the Communications Act, as amended, 47 U.S.C. §§ 151-154 and 254, and sections 0.91, 0.291,
and 54.722(a) of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, and 54.722(a), that the Request for
Review filed by Atlanta Public Schools, Atlanta, Georgia, on June 2, 2003 IS GRANTED and the
application IS REMANDED to USAC for further consideration in accordance with the terms of this
order.
9. IT IS FURTHER ORDERED, pursuant to the authority contained in sections 1-4 and 254
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and sections 0.91,
0.291, 1.3 and 54.722(a) of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, 1.3 and 54.722(a), that
section 47 C.F.R. § 54.507(c) IS WAIVED to the extent provided herein.
15 Id. at 5.
16 Id.
17 47 C.F.R. § 54.507(c) (2001).
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10. IT IS FURTHER ORDERED, pursuant to authority contained in sections 1-4 and 254 of
the Communications Act, as amended, 47 U.S.C. §§ 151-154 and 254, and sections 0.91, 0.291, and
54.722(a) of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, and 54.722(a), that the Universal Service
Administrative Company SHALL COMPLETE its review and ISSUE an award or a denial based on a
complete review and analysis no later than 90 calendar days from the release date of this order.
FEDERAL COMMUNICATIONS COMMISSION
Trent B. Harkrader
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau